Clorox Shares Could Rally As Operations Revive After Cyberattack, Says Bullish Analyst

Clorox Co CLX continues to estimate the financial impact of a crippling cyberattack.

The company's shares spiked on Friday, Sept. 29, after the company announced that all manufacturing sites had become operational. Analysts argue the rally could continue Monday.

The reduced uncertainty could lend upside to its stock, according to DA Davidson.

The Clorox Analyst: Linda Bolton Weiser upgraded the rating for Clorox from Neutral to Buy, while keeping the price target unchanged at $152.

The Clorox Thesis: Before the cyberattack, the household goods company was “solid.” Estimates have been reduced to reflect the near-term impact on earnings and the longer-term share impact, Bolton Weiser said in the upgrade note.

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The stock had rallied 25% over the first four months of 2023, "driven by several consecutive quarters with upside sales and earnings surprises,” the analyst stated. “Gross margin had been recovering strongly due to price increases that were accompanied by better-than-historical volume demand elasticities” and the company’s market share was stable despite the price hikes, she added.

The earnings estimate for fiscal 2024 and 2025 have been reduced from $5.13 per share to $4.35 per share and from $6.24 per share to $5.60 per share, respectively.

CLX Price Action: Shares of Clorox had risen by 0.27% to $131.41 at the time of publication Monday.

Photo: Mike Mozart from Flickr